Ron Paul: All we have to say is, what do they have to hide?
When Ron Paul's bill to audit the Federal Reserve was blocked through a parliamentary procedure, some people had to ask - what is so wrong with auditing the Federal Reserve?
The question reminded me of something. So I dug through my old writing and found this little gem that has never been fully explained to me.
(Bloomberg) -- Last week the New York Federal Reserve made what may go down as the most misguided move in the history of the Federal Reserve system. They laundered money for North Korea.
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Here is the back story.
Some Wall Street talking head said today that the worst is over. Oh really. These "earnings" announcements don't really reflect that. This past week we have heard the Goldman Sachs, JP Morgan Chase, Bank of America and Citigroup all reporting a "profitable" second quarter. But don't be fooled by the hype. These reports of "profits" are certainly not an indication that the economy is improving or that these beneficiaries of tens of trillions of dollars of taxpayer money have survived the financial crisis.
These financial conglomerates have one big thing in common: the benefit of borrowing money from taxpayers at very low rates. They used this cheap money and made profitable trades in the market. In some cases they sold off parts of their business. That is it. They certainly didn't do anything to help the economy.
Let's take a closer look at these "profit" announcements:
Robert Shiller, the co-creator of the S&P Case-Shiller Index, which tracks national housing prices, is a man that has earned a great deal of respect for his knowledge of the real estate market. Yet he is still guilty of saying the silliest of things.
For instance, the other day he said, "There could be another bubble...people have gotten very speculative in their attitudes toward housing."
To be fair, Shiller qualified his statement by saying he doesn't think another housing bubble is likely, or will happen soon. Nevertheless, that isn't how bubbles work.
Friday is always the day for bad news and buried news and today is no exception. The BLS has unemployment statistics. Many areas are exceeding 10% unemployment rates, ya know that magic number that wasn't supposed to hit so soon. The national rate is still hovering around 9.5%.
Michigan 15.2%
Rhode Island 12.4
Oregon 12.2%
South Carolina 12.1%
Nevada 12.0%
California 11.6%
Ohio, 11.1%
North Carolina 11.0%
Florida 10.6%
Georgia 10.1%
Delaware 8.4%
It seems North Dakota is the only state with an increase, 4.2%.
Michigan jumped 1.1% in a month and so did Wyoming 0.9%, and West Virginia, 0.8%.
Regional and state unemployment rates were generally higher in June.
Thirty-eight states and the District of Columbia recorded
"Unemployment compensation, as we conceive it, is a front line of defense, especially valuable for those who are ordinarily steadily employed, but very beneficial also in maintaining purchasing power. While it will not directly benefit those now unemployed until they are reabsorbed in industry, it should be instituted at the earliest possible date to increase the security of all who are employed..."
This morning the Census Bureau reported that Housing Starts increased to 582,000 in June from May's upwardly revised 562,000. Year-over-Year starts are still down (-46.2%).
I'm unable to post graphs at the moment, but Calculated Risk has an excellent one, showing that housing starts are a leading indicator, always borttoming before the end of recessions. Note the recent strong turn-up in our current recession looks like the harbingers of recovery from past recessions.
As I listen to President Obama's speech acknowledging structural problems with the U.S. economy, yet do not see policies that will actually do what is needed and never mentions manufacturing or trade, one person I find quite insightful is mathematician Ralph Gomory.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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